Chinese government takes control of tent production in Chinese factories - SNEWS

Chinese government takes control of tent production in Chinese factories

On May 29, SNEWS® learned that the Chinese government had seized control of all Chinese-owned tent factories and existing inventory throughout the country as part of the disaster relief effort for the earthquake-ravaged region of central China near Chengdu. Textile factories that supply tent fabrics have also been seized, we have been told.
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On May 29, SNEWS® learned that the Chinese government had seized control of all Chinese-owned tent factories and existing inventory throughout the country as part of the disaster relief effort for the earthquake-ravaged region of central China near Chengdu. Textile factories that supply tent fabrics have also been seized, we have been told.

The latest reports out of China have indicated the goal is to provide up to 2 million shelters for the 3 million people who have been displaced from their homes.

In all factories, military personnel are stationed on the factory floor, sources told SNEWS®, to ensure that for at least the next 30 days, and perhaps as many as 45 days, all tent production coming off the factory floors is designated for the earthquake relief efforts.

Only Chinese-owned factories are currently affected. A number of manufacturers we spoke with confirmed that in Shanghai, their factories were now under government control. However, SNEWS® also learned that tent production at a factory owned by Taiwanese citizens just outside of Hong Kong and another factory further north are not under Chinese government control at this time.

Almost all U.S. tent manufacturers we spoke with, including Mountain Hardwear, Coleman, Eureka, Marmot, MSR, GoLite, Kelty, The North Face, and Slumberjack, have confirmed that existing stock levels and preseason orders for fall 2008 product are essentially unaffected. One company, Sierra Designs, manufactures its tents in Vietnam and is completely unaffected by government controls in China.

Also affected by government seizure are camping furniture factories. Geoff O'Keeffe, president of Slumberjack, told SNEWS® that all preseason orders for camp furniture from his company are now on backorder.

While there are rumors that the Chinese government may also be looking at asserting control of sleeping bag production too, that appears less likely, according to Kenny Ballard, president of Kelty. More likely, he told us, is that production of wool blankets and quilts would go to relief efforts since those items are much easier to produce quickly and efficiently.

What impact this will have long term on raw material supplies is unknown. For many manufacturers, we were told, fabrics are sourced from Taiwan or other parts of the globe, so there is minimal impact on that aspect of production. And for those who source fabrics in China, we were assured that Chinese textile suppliers are so efficient, any impact to supply will be minimal -- if there is any impact at all.

Retailers should immediately contact their manufacturer reps or sales managers to ascertain current and expected tent stock levels as information coming out of China is changing daily. Certainly, SNEWS® will do its best to ensure this story is updated as needed via the SNEWS® Chat.

SNEWS® View: While it is hard to imagine a government being able to assert control of factory production in the United States, Canada or anywhere in Europe to meet the need of its citizens in a disaster, it is hard to argue with how the Chinese government is going about this. If it is a choice between using an old tent this year or next to go camping, or ensuring a family facing life without a home gets a new tent, the decision is not hard -- family without a home wins hands down.

Working somewhat in the favor of U.S. retailers and manufacturers is the fact that the camping season started a bit late this year in most parts of the country so demand for tents has not yet ramped up.

Tent poles for the most part are made outside of China, but this is the fly in the ointment regarding ramping up tent production again once the Chinese government relinquishes control of the factory floor back to the factory owners. Whether it is 30 days, 45 days or even longer, orders from all manufacturers for needed product fill-ins and then for spring 2009 product will likely have to be adjusted. Perhaps down, but likely up. Suddenly, rather than a staggered demand for tent pole delivery, the production load will be concentrated into a much tighter window as factories struggle to catch up. This could cause a bottleneck that may, and we do stress may, affect availability of tents into spring 2009.

Retailers would be wise to stay closely in touch with your manufacturer's rep or sales manager to ensure if you have to make order adjustments to keep your store in an in-stock position, you are not left scrambling at the last minute yourself. This might be one of those times it is wise to take orders early if you can, and allow your turns to tick down a notch.

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